America Online Cuts Into Marketing Staff

Dulles, Va.-based America Online, a unit of AOL Time Warner, confirmed that it had eliminated 20 positions from its 750-person interactive marketing group.

A spokesperson for the company declined to comment beyond saying that the layoffs were related to earlier restructuring efforts. In August, America Online laid off about 1,200 staff members from across the company, which at the time employed about 15,000.

At that time, the company appointed Robert Friedman to the post of president of America Online’s interactive marketing group, which handles ad sales across the online service and its affiliated Web sites.

Earlier in the year, AOL Time Warner announced cuts of about 15,000, including about 750 at the Dulles headquarters of America Online.

The cuts come as New York-based AOL Time Warner continues to feel the sting of dwindling advertising revenues. Last month, during its third quarter earnings report, AOL Time Warner posted a net loss of $996 million — a loss wider than last year’s $902 million.

While total revenues rose by 6 percent to $9.3 billion from the previous year (a figure calculated based on the combined revenues of America Online and Time Warner, which were separate entities until January, 2001) ad sales slipped 5 percent, to $1.9 billion.

Still, America Online has proven more successful in keeping ad revenues from plummeting than many competing Web publishers — who have seen double-digit year-to-year declines in advertising revenue.

That fact chiefly is attributable to AOL Time Warner’s habit of inking cross-media deals, which have America Online ad inventory playing a supporting role to flights in print or broadcast properties. In August, the company created a Global Marketing Solutions Group to oversee the implementation of such deals.

America Online isn’t the only major Web publisher looking to slim down. Yahoo chief executive Terry Semel hinted in the company’s third-quarter conference call that it would be undertaking a restructuring. Semel declined to discuss the reorganization before Nov. 15, when Yahoo meets with financial analysts at its Sunnyvale, Calif. campus.

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